New-home construction continued at a vigorous pace in July, the U.S. Commerce Department reported. Housing starts dipped 0.1 percent for the month to a seasonally adjusted annual rate of 2.042 million units following upward revisions to the May and June rates. The pace of starts in July was 2.8 percent above a year ago and remained above 2 million units for the fourth month in a row. Single-family home construction edged up 0.5 percent to a pace of 1.711 million units for the month. This was 3.0 percent above the pace of a year ago.
"The fundamental supports for housing demand are still in place," said National Association of Home Builders (NAHB) Chief Economist David Seiders. "Financing conditions remain favorable, job formation is fueling household growth, and ongoing increases in house values are bolstering the ownership appeal of single-family homes and condo units."
Three of four regions reported an increase in housing activity for the month. In the Northeast, construction of new homes and apartments rose by 6.5 percent in July. The Midwest was up 9.1 percent, and the West increased by 2.1 percent. The pace of construction decreased in the South by 5.4 percent.
Multifamily housing starts dropped by 3.2 percent for the month, but the seasonally adjusted pace of 331,000 units was 1.8 percent above the pace of a year ago.
Issuance of total building permits increased 1.6 percent to a seasonably adjusted rate of 2.167 million units for the month. Single-family permit issuance was up 2.0 percent to a record pace of 1.686 million units for the month. The pace of multifamily permit issuance was up 0.4 percent.
Seiders noted that the backlog of unused permits was historically high at the end of July, particularly in the single-family sector. He said, "Builders have accumulated an unusually large supply of permits in order to meet future housing demand in markets with serious supply constraints. That bodes well for housing production in the near future."
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